S.B. 602 Summary

• Prohibits managed care contracts entered after June 30, 2021 from authorizing pharmacy benefit managers to reimburse pharmacies on a maximum allowable cost basis; voids any existing provisions using this method.

• Requires pharmacy benefit managers to reimburse 340B pharmacies and independent or rural pharmacies at rates no lower than the rural rate, with 30 days' notice required before any rate changes.

• Prohibits pharmacy benefit managers from engaging in unfair methods of competition or unfair practices, with violations subject to penalties under Hawaii Revised Statutes chapters 480 and 481.

• Prohibits "gag clauses" that restrict pharmacists from disclosing treatment information, cost-sharing details, or more affordable alternative drugs to patients.

• Requires pharmacy benefit managers to submit annual transparency reports to the insurance commissioner detailing rebates received, administrative fees, retained rebates, and utilization data; commissioner must report findings to the legislature annually.